April 25, 2008	Friday	Rabi-us-Sani 18, 1429

KARACHI, April 24: Consumers already groaning under rising food inflation would further suffer as the falling rupee against the dollar will push up the prices of imported food items to new highs.

The prices of food items have already been surging in world markets and the on-going falling value of rupee would prove a double-edge sword for the consumers in terms of high prices.

According to the Federal Bureau of Statistics (FBS), Pakistan’s food group import bill has already increased by 43 per cent to $3 billion in July-March 2007-08 as compared to $2.1 billion in the corresponding period of 2006-2007.

In case of pulses, the country will need at least 0.2 to 0.3 million tons of imported gram pulse owing to short crop of 0.45-0.50 million tons this year. Annual consumption of gram pulse is estimated at 0.7 million tons.

In July-March 2007, import of overall pulses fell to 226,242 tons ($132 million) as compared to 445,704 tons ($203 million) in the same period of 2006-07. Chairman Karachi Wholesalers Grocers Association (KWGA) Anis Majeed said that last week a dollar in the inter-bank trading was available for Rs63, which is now priced at almost Rs65. This difference in the rupee-dollar parity makes an initial impact of Rs1to Rs1.50 per kg if a commodity price is supposed at Rs50 per kg.

The slowdown in total imports of pulses was mainly because of low weight of gram pulse but this year the country will need to import in order to meet the local consumption.

In other pulses, masur rate in world market has surged to $1,200 per ton (Canada and Australia) as compared to $1,000 per ton a month back. The price of Arhar (from Burma) had also increased to $680 per ton from $620 per ton a month back. However, mash price of various qualities had been stable at $600-700 per ton.

Ghee and cooking oil prices will again come under pressure and a leading branded packer, who asked not to be named, said the impact of falling rupee will result in increase in price by at least Rs6 to Rs8 per kg next month if the price of one dollar is now quoted at Rs65.50 (forward counter) as compared to Rs63.

The edible oil industry has been solely dependent on the import of palm oil and soyabean oil as these are main raw materials being imported from Malaysia and Indonesia for preparing ghee and cooking oil.

Pakistan’s import bill for palm oil has surged to $1.1 billion (1.3 million tons) in July-March 2007-08 as compared to $662 million (1.31 million tons) in the same period of 2006-07. Import of soyabean oil stood at $84 million (92,301 metric tons) in July-March 2007-08 as compared to $31 million tons (33,169 tons) in the same period of the last fiscal year.

He said that the falling value of the rupee will push up the domestic prices as the palm olien and soyabean oil prices were already hitting new peaks followed by rising tin plate prices.

Local tea prices, which had already been raised few months back, due to prices increase in Kenya, may see another surge after the rupee fall.

Tea import bill during July-March 2007-08 was recorded at $149 million (78,158 metric tons) as compared to $168 million (87,446 metric tons) in the same period of 2006-07.

Regional chairman Pakistan Tea Association (PTA) Mohsin M. Saify said that the impact of rupee decline against the dollar coupled with rising prices in Kenya is expected to push up the price of imported tea by Rs12-15 per kg.

The impact of falling value of rupee will also be witnessed in shape of rising prices in milk, cream and milk for infants. Its import during July-March 2007-08 stood at $57 million (19,761 metric tons) as compared to $55 million (28,290 metric tons) in the corresponding period of 2006-07.

Spices’ import during July-March 2007-08 was registered at $53 million (84,979 metric tons) as compared to $41 million (67,017 metric tons) in the same period of 2006-07.

The import bill of other food items (not mentioned in the data) had surged to $771 million in July-March 2007-08 as compared to $629 million in the corresponding period of 2006-07.